Air-stable [(R3P)­PdCl2]2 complexes with di-tert-butylneopentylphosphine (DTBNpP, 1a) or trineopentylphosphine (TNpP, 1b) ligands have been applied to Suzuki cross-coupling reactions, and the mechanism of their conversion to the active LPd0 catalyst species has been studied. Precatalysts 1a,b provide effective catalysts for Suzuki cross-coupling of aryl bromides at room temperature, even when the reactions are performed in air. The precatalyst systems provided much higher activity catalysts in toluene/water in comparison to acetonitrile/water. Precatalyst loadings could be decreased by a factor of 50 in toluene in comparison to acetonitrile, while achieving equal or better yields. In acetonitrile/water, ligand metalation to form a [(κ2-P,C-DTBNpP)­PdX]2 palladacycle was found to compete with formation of the active Pd(0) species. The palladacycle shows low catalytic activity; thus, its formation represents a catalyst deactivation pathway. In toluene, clean formation of the active Pd(0) species occurs without competitive palladacycle formation. The improved selectivity to form the active Pd(0) species in toluene appears to account for the higher activity of the precatalysts in toluene/water.